Illinois Tool Works Inc (ITW): Today's Featured Industrial Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Illinois Tool Works ( ITW) pushed the Industrial industry lower today making it today's featured Industrial laggard. The industry as a whole closed the day down 0.6%. By the end of trading, Illinois Tool Works fell 80 cents (-1.3%) to $58.75 on heavy volume. Throughout the day, 4.6 million shares of Illinois Tool Works exchanged hands as compared to its average daily volume of 2.9 million shares. The stock ranged in price between $58.39-$59.93 after having opened the day at $59.49 as compared to the previous trading day's close of $59.55. Other companies within the Industrial industry that declined today were: OSI Systems ( OSIS), down 28.1%, Servotronics ( SVT), down 10.1%, ZBB Energy Corporation ( ZBB), down 8.7%, and Renewable Energy Trade Board ( EBOD), down 7.8%.
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Illinois Tool Works Inc. manufactures various industrial products and equipment worldwide. Illinois Tool Works has a market cap of $28.19 billion and is part of the industrial goods sector. The company has a P/E ratio of 14.8, below the S&P 500 P/E ratio of 17.7. Shares are up 27.5% year to date as of the close of trading on Wednesday. Currently there are nine analysts that rate Illinois Tool Works a buy, one analyst rates it a sell, and seven rate it a hold.

TheStreet Ratings rates Illinois Tool Works as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the industrial industry could consider SPDR Dow Jones Industrial Average ( DIA) while those bearish on the industrial industry could consider ProShares UltraShort Industrials ( SIJ).

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